Japanese giant Hitachi in doldrums

[Naveed Yaseen]

TOKYO: Japanese high-tech giants Hitachi and Canon announced on Tuesday gloomy business results for the last quarter, dousing hopes of a swift recovery after the worst recession in decades.

Hitachi unveiled an overhaul of its key operations as part of a drastic restructuring under new president Takashi Kawamura in response to massive losses inflicted by the global economic downturn. The sprawling conglomerate, which makes everything from refrigerators to nuclear power systems, said it would take full control of five of its key businesses in an effort to boost their international competitiveness. Industry analysts said Japan’s high-tech giants would need more time to return to good health after being battered by the global economic slowdown, which has slashed demand for their products.

“Many Japanese electronics makers are unlikely to achieve a full recovery by the end of this year,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “Domestic demand is still weak while the prospect of a recovery overseas is uncertain,” he said.

Hitachi posted a bigger-than-expected net loss of 82.7 billion yen ($870 million) for the fiscal first quarter through June, against a year-earlier profit of 31.6 billion yen. It kept its forecast for a net loss of 270 billion yen for its full business year through March 2010. “The outlook is extremely uncertain,” warned vice president Takashi Miyoshi.

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